Problemthe market value of fords equity preferred stock and, Ask an Expert

Accounting

Problem:

The market value of Ford's equity, preferred stock, and debt are 7billion, 3billion, and 10billion respectively. Ford has a beta of 1.8, market risk premium is 7%, and the risk-free rate of interest is 4%. Ford's preferred stock pays a dividend of $3.5 each year and trades at a price of $27 per share. Ford's debt trades with a yield to maturity of 9.5%.

Required:

Question: What is Ford's weighted average cost of capital if its tax rate is 30%?

10.12
10.34
11.08
11.47
11.83

Note: Explain in detail and show all computations in proper way.

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91173337

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - during 2017 crimson inc purchased 2775000 of

Question - During 2017, Crimson Inc. purchased $2,775,000 of inventory. The cost of goods sold for 2017 was $2,635,938 and the ending inventory at December 31, 2017 was $544,688. What was the inventory turnover for 2017?

Assignment 1 organization forms and taxationthere are

Assignment 1: Organization Forms and Taxation There are several forms of business organizations. The Internal Revenue Code (IRC) taxes different forms in different ways. The tax implications can sometimes be important en ...

Question - internet assignment search the internet an

Question - Internet Assignment Search the Internet (an entity's website) and find an audit report of the entity's audit of internal control over financial reporting. Determine the following: 1. Did the entity used the co ...

Question - sunshine company purchased equipment for 100000

Question - Sunshine Company purchased equipment for $100,000 in 2012. The machinery originally had an estimated life of 8 years and a salvage value of $10,000. Sunshine used the straight-line depreciation method. In 2016 ...

Question - jinhee purchased a ticket to a concert to raise

Question - Jinhee purchased a ticket to a concert to raise money for the local university. The ticket cost $535, but the normal cost of a ticket to this concert is $145. How much is deductible as a charitable contributio ...

Question - x companys profit equation next year is expected

Question - X Company's profit equation next year is expected to be 0.47R-$12,900, where R is total revenue. Assuming a tax rate of 36%, what must next year's revenue be in order for X Company to earn after-tax profits of ...

Question - canberry corporation had net income of 116000

Question - Canberry Corporation had net income of $116,000, beginning total assets of $856,000 and ending total assets of $760,000. Calculate its return on total assets? 738% 15.3% 655% 14.4% 13.6%

Question - a revenue of 62000 was earned but only 45000 was

Question - a. Revenue of $62,000 was earned, but only $45,000 was collected. Expenses of $36,000 were incurred, but only $30,000 was paid. What is reported operating income? b. Wages of $5,000 are paid every Friday for a ...

Question - what are the steps to obtain the expected stock

Question - What are the steps to obtain the expected stock price 5 years from now if stock is currently selling for $62.8 per share? The dividend is projected to increase at a constant rate of 7.5% per year. Required rat ...

Question you manage a plant that mass-produces engines by

Question: You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production function q = 5KL where q is the number of engines per week, K is the num ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert